Have you ever considered behavioural science and economics as a resource for events and brand experiences? In this episode of 'Behind The Experience' we take a deep look at how human behaviour is affected by change with behavioural scientist Kristen Berman.
Kristen spotlights how COVID-19 could provide your business with a new opportunity or solution and discusses how there are many answers to be found in observing human behaviour through digital and physical experiences.
“...the opportunity for companies and brands and people is to take advantage of what's happening right now. Which is we're all changing our environments.”
This is a part of our digital toolkit Sense Group is curating to help brands emerge from the crisis stronger than before. For more information and resources head to www.sensegroup.com.au
Learn more about Kristen Berman and Irrational Labs here:
Read the full interview.
Thanks for tuning into Behind The Experience. I'm your host, Mark Bennedick, co-founder and director of Sense Group, here in Sydney. And, we're doing things a little bit differently at the moment. As you all well know, the event and brand experience industry is seeing a complete disruption from the current health crisis, and while this has shaken up the industry a little bit, it's also a really good opportunity for innovation and positive change. So, at the moment, we're curating a toolkit to help brands come out the other side of the crisis stronger than before. And today, I'm really excited to talk to you today about our guest, today's guest.
Kristen Berman is a behavioural scientist, based out of San Francisco. She co-founded Irrational Labs in 2013, a behavioural research and consulting company, and she's the co founder and principal at Common Sense Lab, a Duke University initiative dedicated to improving the financial wellbeing for low to middle Americans and was a member of the founding team for the behavioural economics group at Google. And has previously hosted one of the top behavioural change conferences globally, Startuponomics. Kristen has also co-authored a series of workbooks with Dan Ariely, called Hacking Human Nature for Good: A Practical Guide to Changing Human Behaviour. There's a lot of things to get through there, Kristen. How are you?
Good. Thanks for having me, great to be here.
Pleasure, pleasure. Well, thanks for coming on and spending the time today. We came into contact with you through some of your interesting work and had a look at the work you're doing with Irrational Labs and we particularly thought it would be really good to talk to someone like yourself who works really heavily in researching and understanding human behaviour. And this is obviously a massive change going on in the world at the moment with corona and what businesses and people are going to be doing on, or during, and also I guess after this passes. Do you want to give us a bit of a background just on exactly what a behavioural scientist does, or economist does? Just for some of the people who maybe don't realise the kind of work that you do in that field?
Sure, of course. So behavioural economics is basically called the science of decision making. In a typical economics world we make decisions based purely on utility or time and money and we're really rational. So you can imagine if you buy a cup of coffee for $3, the rational person thinks about all the places that $3 could otherwise have been used and then makes the decision to buy the coffee. More likely than not that's not how most of us make our decisions to buy coffee or not. We just get up in the morning and we see if the line is too long. And so we take these decision shortcuts all the time. And the behavioural economics world basically studies those kinds of decision shortcuts that we take.
And many times the finding is that we're influenced by what we say is the environment of decision making. So how something is designed. What's going on in our environment may have more impact than the attitudes and beliefs. So I may really want the coffee but if the line is too long, or maybe actually if there is no line at the coffee shop because it implies nobody else likes the coffee, I may not go in. So the field of behavioural economics studies these types of decisions and then we make or try to make small tweaks in the environment to help people behave in a way that they ideally want to behave.
So if you want to save money, try to get you to save more. If you want to eat healthy, try to eat more. Or not eat more, eat less.
Well it's an interesting dynamic because you're dealing with people who probably consider themselves to be quite rational but their behaviours and their actions probably say something totally the opposite. Do you find patterns in there? Are there a set of rules to go by which seem to work in most cases? Or is every challenge or problem you deal with starting from a clean slate?
A little bit of both. So basically, the main premise of this field is that the environment impacts our decision making. So most of the time we do end up studying the environment of decision making in every small detail to figure out how to change it. But there are a few principles.
More often than not, people take the path of least resistance which means we do the easiest thing. It doesn't mean we're lazy, it just means we're basically very busy people. Lots on our mind, a lot of things to pay attention to. And so we're looking for the path of least resistance.
You can imagine if it's hard, we won't do it. If it's easy, we may do it. And that's one of the main, very simple principles that drives the field.
That makes sense. I think that would make sense for most people for sure.
Yeah, it doesn't mean anything about... We can design something that everybody loves and really likes, but if it's too difficult to do... And by the way, by too difficult I mean, just an empty field that you ask people to fill in. Like our level of attempting to take the path of least resistance is probably one of the more surprising things that I see every day that humans do. And I'm acutely aware of it. So, you can never make things easy enough for us.
Do you find that happens for yourself? Are you more aware than the average person, do you think, working in the field? Or do you find yourself or catch yourself doing those things as well?
No, that's kind of the beauty of it. I do. So most of our decisions are made quickly. We're emotional beings and we're making very quick decisions. So as much as I know decision making, I still make mistakes. The opportunity that I have knowing that mistakes are made is when I can slow down and think about the decision. And take a minute and weigh the options. And we think about small and big decisions. It's hard to intervene at small decisions. What type of camera do you want to buy? What type of iPhone do you want to buy? Maybe smaller decisions, where we're making them based on emotion and heuristics. "What kind of job do I want? Who do I marry? What house do I buy?" All of those are bigger decisions, and we have more time.
Yeah, that makes sense. There's decisions that really cross the spectrum of time from longer term to short term in the moment.
Across the world right now there's all sorts of things going on in business and change and probably more of a change than most people have ever experienced before in their lifetimes. What do you see as some of the opportunities or even challenges right now, for individuals or for brands, as we’re working through this pandemic or coming out the other side? What are some of the things that you think might really change? What might be different to the way things have been previously?
Great question. So basically going back, the premise of behavioural science is that our environment can change behaviour. And other than that it's very difficult. It's very difficult to pick up a new habit. If anyone's tried meditating they may understand this very closely but it's very difficult except if you change your environment. And I think the opportunity for companies and brands and people is to take advantage of what's happening right now. Which is we're all changing our environments. We're staying at home and working from home. We aren't going out to eat as much. We're looking at our finances in a different way.
So that is really the time for behaviour change. There was a nice study done that looked at people right after they relocated, right after they moved and tried to nudge them to do some specific behaviours. This was around sustainability; getting you to turn off the lights, maybe walk instead of take a car. And what they found is that people were most receptive to those nudges within three months of moving.
They compared people who didn't move to people who did move and then tracked them over time. And the thought is when you move, you really change your environment. You're changing it up. Most of life is very similar. So I think in COVID times I think brands can really understand that they can talk to their customers differently. People may be much more receptive to change and to trying something new, doing something different than we've ever done before.
So, do you think that there is almost a window of mental availability where there's that opportunity to create habit change or change purchasing decisions when it comes to brands or things like that? Or can we create those windows for people?
I think we can help create those windows for people, but I think what's happening right now in COVID is a real window where we're much more open to doing things differently because our whole lives are shaken up. And so, there's a real opportunity right now to do it but then when people come back online, they're also going to be going back to this, maybe a different environment. Whether they've changed jobs or they've changed their routines with their families given the last few months. So I think when people come back it is also a time to realize that routines are changing, habits are changing. And we may be more open to new things that we would not have otherwise said yes to.
Yeah, there's a lot of debate I think, out there at the moment, too, as to how the whole working environment is going to be, post. Are a lot of people going to be still working from home? What's the employee experience, working for companies? How do we instil that company culture within people working for the company if a lot more working away from the typical office space?
I mean how do you think that's all going to play out? Because I think part of our company here, where we're based in Sydney… obviously, we're a creative company, and we're building brand experiences for corporates and a lot of that energy and that incidental conversation that happens around the water cooler and the creative chit-chat, is part of the way in which we build ideas and solutions.
So it's interesting to me within my own business how we might be able to maintain and facilitate that, if we stick with a model which could be part office or part from home, or a lot more at home, work. I'm interested to know what your thoughts are on that and whether you think this is a habit that might stick, ultimately, for business? Is it going to be potentially still a successful model for a lot of businesses?
Yeah. I may have a contrarian viewpoint here. I think the answer we'd like to hear is, "we can make it work," by working... Working remotely has its own benefits and we can improve on it and still maintain creativity and relationships. I think that it will be very tough to maintain this remote work environment and still have the level of relationships maybe needed and accountability needed to really be, I think, happy at work. I'll give you a few examples.
Well, maybe not a few examples but the idea of personal habit change. We all probably acknowledge it's difficult, right? You may want to, as I said, meditate. Or you may want to eat better, you may want to run every day, and more likely than not, we've all struggled with that. Work is fascinating in that we take on really big projects and we take on tasks every day. And more often than not, we don't struggle. We get crazy amounts of stuff done; launch big projects, put on big events. And it's not like you go into the office and say, "I just kind of didn't want to do that today, and I kind of forgot."
So there's [something] really special about working with other people, and having that public visibility of our behaviour that going into a workplace really does for us. And I think it's, sure, it's achievable in remote work but it's really special when you're working amongst a group of people doing something together. Everybody's holding each other accountable for pretty big, hairy, audacious goals. And one of the reasons you can reach them is because you feel really bad if you let your teammate down and you really want to work hard together with them.
So yeah, I worry about moving to fully remote. We lose some of that special sauce of what makes it easy to get work done, and move more into the private sector, which is, we all struggle with personal habits. We don't really want to struggle with our work, in that same way.
Yeah. Yeah. I think there's a tendency, part of me I think definitely agrees with you on that one. I think just knowing the way that it works within our space and the way you do need that energy from people. And that works in all sorts of different ways. As a company we've been having virtual drinks on a Thursday and it's great and it's awesome to catch up with people. But you imagine the difference between that and say, being down at the local bar or pub. There is a need for people to have human contact, and there's sort of a... I guess, there's an energy that you just don't get, digitally.
And that's one component of it and then the other component you're talking about there is just that accountability and that social pressure, almost, that encourages people to get things done, that maybe they wouldn't be able to discipline themselves to do otherwise. It would be interesting to look at, say some of the industries that have successfully worked off a work from home model and see the kinds of things and tools that they're putting in place or how they get around some of those challenges because I think that there's going to be a lot of people out there thinking about this at the moment and wondering, will it work?
What do you think as well about some of the things that people... other things that people might need to be thinking about? Maybe from a brand perspective, might be good to think about. What are the kinds of things do you think brands are going to need to think about when they're talking to their consumers or their audiences coming out of the back of this?
I know you mentioned before, there's a window for these brands to be able to talk to people in a different way. Is it going to be a more empathetic approach, or what do you think, first, from your point of view, [what] is going to be important for brands to think about?
Yeah, it's hard to say generally, for all brands. I think, playing off this point that people are maybe in a different mindset. We use the word, mental model. People probably had a mental model of what the brand meant, how it worked, the relationship to it. And I think the opportunity is for the brand to assess what that is, and then figure out if they want to change it. Because, now is the time. Now is the time to change it, if there ever was one, because people are saying, "Okay, my life has changed, and I could be open to re establishing a new relationship with a brand." So what that could look like is relaunching something, or reinventing yourself, or renaming something. Getting people to really re meet you in a different way because their minds are more open. But I think that's [crosstalk 00:16:22] and tactically, that's looking at your old mental model, and seeing how it could change.
Dan Ariely, who's a professor at Duke, and we've done a lot of work together started this insurance company that is called Lemonade. And it's fairly popular, but one of the things that they really did is to say, "What is the model of insurance companies? What's the mental model of insurance companies?" And after looking internally and we now may know this, we don't trust them as much as we trust other types of companies. We think that maybe if you submit a claim, maybe it won't get approved. There's lots of work.
And so they said, "How would we change that mental model?" And they released Lemonade, which is basically using some of the insurance premiums towards charity. So they're signaling that they are a different mental model than what people are used to from an insurance company and trying to get people to think about them as somebody different. And likely, it's possible that brands can kind of use this moment in time to assess what they're currently doing and signal that they're changing.
Yeah. That's cool. I like that premise. It's, I see what you're talking about with the mental model. It's really just a lot of people talk about it in businesses, in trying to provide a unique selling point. Or what makes you different from somebody else? And coming at it from your perspective and your approach, changing a mental model is somewhat similar in that way too. But using a certain... your world of behavioural economics, like that framework. Which allows you to answer these kinds of questions and give these different answers, and come up with a company like that. I think that's really, really interesting.
How do you apply that to an instantaneous world? Like, say something like a brand experience where we've got people coming into a space or exhibiting something for the first time. And they're doing it in a very short period and timeframe. And I guess, you haven't had a lot of opportunity in the past to test and learn and apply any learnings to optimise an experience. What's a better way for people like us, to be able to try and get it right, more often than we get it wrong?
That's a great question. I think you hint on it a little bit, to think about a testing and experimental mindset. Most of the premise of behavioural economics is around not trusting our intuition and really, that things are not as they always seem. And so many times we make assumptions about what people do, what they want. And very frequently, those are wrong. And it's only really with an experiment or a test, that you can figure out that they're counterfactual, right? If you just do something one way, you'll never find out what happens if you do it another way.
Yeah. And I think sometimes, we get too scared, right? "Will customers get confused? Will they not like it? What's the downside?" And we forget the upside. That by going with the first thing you thought about, you're making an implicit assumption that this is the best thing. That this is the maximum, that you've hit it on round one. And that's just likely not true. And so thinking about the stuff that you're doing and the types of small experiences that are being created as learning opportunities versus "Did you nail it?" seems much more practical and on point.
And, some of that may be, we just did an experiment with no smalltalk cards, which is basically one of the insights on conversations is, we mostly go to the lowest common denominator of conversation, which is small talk. And reasonably, it's easy to do, and you can connect with people at a surface level. But, our hypothesis was that it's not good for relationships. If you really want to connect with somebody, talking about more vulnerable topics is better.
And the other hypothesis was that it's very difficult for people to do that. If I started this conversation and said "Hello, what's your deepest fear?" That's kind of weird. And so our hypothesis was that we'd have to help people do this. We'd have to give the social norm that this is not only permissible, but that's what's expected. So we have these cards, we pass them out, we tell them for the next 30 minutes, please use the cards. Talk to your neighbour.
And what happens is that people use the cards. And they veer away from what's most comfortable; which is our weather, our sports, our vacations, and dive a lot deeper. And so our experiment there was to figure out, do people become more connected with these cards? And we found out, over two different experiments, that yes, that diving deeper actually does help people. A, they like it when it's with cards. They get very nervous and don't like it when we just say, "Hey, talk about something vulnerable."
But, they do need the crutch. We need the crutch of the cards, to do it. [crosstalk 00:21:51] And so, it's that type of experimental mindset that says, "We could be wrong. Maybe the cards are overwhelming, and weird and, in and of themselves. But let's try it, and measure, and see if we can create a better experience by trying something out of the norm."
Yeah. That's cool. So I guess what I wound up taking from that is data is important to take out the assumptions that one might have when putting together ideas. And I guess that test and learn pattern can be applied across a range of things, rather than having it exist in a silo. That sounds to me, and I'm thinking about the kinds of things that we do and the kinds of frameworks that we might try and work towards, to try and get that mindset across all of the work over a period of time.
Thinking too, just with the work that you've done in the past, and what have been some of your most memorable projects that you've worked on? Or, maybe even some of the projects that sort of surprised you, when you got involved and challenged your assumptions on the topic as well. I know you've worked with a bunch of different brands in the technology world and not for profits and all sorts of things. What are some of the things that stand out for you so far?
Yeah, great question. We just completed an experiment with West Texas University, which is a university in the states, and a company, a tech company called AdmitHub. And we were trying to help in the US college which is obviously very expensive. And there is financial aid available but a lot of people, around two million people, just don't take the aid. Which is surprising, given it's free money. And we completed an experiment and found that, by changing how we ask the question to get people to complete or to submit their financial aid form we could increase the number of students who applied for the aid. Now, this is very interesting because it's free money. So why would just changing how we asked the question change the outcome?
But what we did is reduce the perception of friction involved in applying. So instead of saying, "Do you want to fill out this very long application? Please click here to do it. Here's a reminder, when it's due by." We said, "It's just part of the process. It's part of the process of applying for, or going to, this college, is filling out this form." And what that does is just change the mindset on, "Oh, do I do it? Do I not? When do I do it? Should I do it? Maybe I won't qualify," to, "It's a lot of work in order to do it," and say, "Okay, this is the next step in the process, and I'm going to continue."
So we took away a decision that somebody had to make and instead we just made it the path of least resistance to continue. And what I really like about that is, it's a small change. We sent out a text message and then we sent out one reminder and if it was rolled out to all of the US we'd have around 200,000 more applications from students with just very small changes.
Yeah. So I think sometimes people rely too much on big strategies and big pushes when much of life is lived in the small details.
Yeah. Right. And that's a really great example. That's a very small change and really, costs nothing to implement. It's just really thinking through how do we get rid of the friction.
Exactly. Yeah. And that's going back to one of the insights of behavioural science in general it's really about helping people take the path of least resistance in ways that help them achieve what they want to. And very small things can get in our way to prevent us from taking action. So [inaudible 00:25:54].
[crosstalk 00:25:59] design. I said, we're very fickle creatures.
Yes, we are.
One thing I read of yours as well which I thought was a really interesting piece was Burning Man Festival. Because that's, for people who don't know about Burning Man Festival, it is a very well known festival in the US and it's essentially a counterculture festival where people are able to go and live out almost a utopian existence or an alternative existence as to how society operates. Can you tell us a little bit about your experience of doing that and what you got out of that?
Yeah, for sure. So if you have not been to Burning Man, I highly suggest it. I think it may not be for most people. It may feel like something you wouldn't do. But in reality there's not many things in life that completely flip most of the paradigms that we have on our head. Burning Man creates a new city and the interesting thing about the city is that it's participatory, which means most people who attend contribute something.
And so you really couldn't imagine a place by which people could do more work for something. So many times when we're creating events or activities, we want to have very small amounts of work that we require our attendees to do. And the interesting thing about, well there's many interesting things about Burning Man, but one of them is that really people kind of create. They create art, they create experiences, they create their themed camps. Everyone who attends is participating in the whole event.
So I think you can ask more things of participants and it will get them more ownership and more involvement in the event. So that's one thing about Burning Man is, everybody who attends is part of it.
And it's amazing how much effort people will go to in their own spare time. Obviously these people are not being paid or they're using their own money to create some of their sculptures or their cars that they drive around in. It's all, it's all off their own back back, isn't it?
Yeah. It's incredible. It really is.
And the other frame is giving. So I think one principle of happiness is, is not that necessarily, we are happy when we get more things. Or consumerism will make us optimally happy. We actually quite enjoy giving things to people. And Burning Man is based on this principle, where the art that you're creating is made for people to experience it. The experiences different groups of people who do these camps do, is designed so people experience it. You actually have little small marketers yelling for people to come and experience whatever they've built. It's all free. But you really, no one gets any money for you experiencing their art, but everybody really wants you to, because it feels so good to give.
And so I think the Burning Man has designed a lot of things from First Principles of Happiness, which is, meaning and purpose. Which is, everyone is creating something there or creating something [that] gives us meaning and purpose and happiness which is a lot from giving to other people. And probably more events and things could be designed from these types of first principles, of living.
Yeah. What is it about Burning Man do you think that has enabled such a strong following? Because from what I know and I haven't been to Burning Man, but one day, I'll get there... What is it about the culture that they've created that has really drawn people into, to be, to put their belief and to put their effort and their own funds behind it? Do you think it is some of those things that you're talking about, like purpose and meaning and happiness? Or is it a void, do you think in society that is being filled which people don't get to play out in their normal lives, or...
All of that… you have engineers at Google who go to Burning Man and they are creators of art. And where and when would they have an opportunity to do this in another setting? And so, Burning Man creates the place in time for people to be a little bit more creative than the normal 9:00 to 5:00 work that we do. And it creates a lot of opportunities for people to have different roles. Whether, I plan the opening ceremony for our theme camp, right? Where I'm in no world would I be doing that in a normal scene and setting, planning an opening ceremony for a group of people to start off a week.
And it's quite entertaining, and I get a lot of joy from it. And so, people really lean into the things and create the roles for themselves. Nobody's giving - nobody gave me that role. You're creating the opportunity to try something out yourself. And in a work environment context, many times people give you the role. And you say, "Okay, I will do the role."
And Burning Man hacks that and hacks the mental model we have of work. Is that, "It could be enjoyable. We want to do it."
Yeah. Yeah. That's cool. Definitely interested to get there one day. We'll look, Kristen, we're pretty much on time, at the moment. Is there anything else you want to add? I mean, I'm just thinking [about]anyone out there who's interested in behavioural economics, or behavioural science, who maybe hasn't looked at it, or doesn't understand the value that it could have for them as a person or for a brand or a business? What's, maybe any misconceptions, or anything that you think people would need to know about, to start that trail of understanding how it can be valued differently?
Great question. So I think two things. One is, really thinking about if given the first point is the environment of decision making influences our decisions more than we realize. Many times we feel like, if we don't, people may feel like if you change the environment, you may be manipulating people. Or, getting them to do something different.
We instead find it offensive if somebody... Inaction is the same thing as action. If you aren't changing the environment of decision making and imagine that it's in the US unemployment forms are extremely long and hard. People could say, "If you change it, you may be incorrectly forcing people to do something, or not." But the reality is, if you don't change it, many people won't apply or get confused because it's just so hard and long. And so inaction is many times the same as action. And we forget that. I think people, people forget that.
And we should look at our environments and think about how we change them to serve our purposes. And by our purposes I mean like, how do you go home and change your refrigerator so you may not [eat] the thing that you don't want to eat, right? We have control of our environments, in very specific ways, from personal and professional.
And then the second thing is, we do online boot camps, by which people can dip their toe into the field. And, I'm obviously biased, but I think these are great practical ways to learn the principles, and then try to apply them to your area of work.
Well, that's fantastic advice. And look, thank you very much for coming on and chatting today, Kristen. I really appreciate it and I think it's a really interesting field that you're in. And also personally interesting to myself being in the work that we do. We do tend to try and apply these principles, albeit in a less formal way than I think you're going right down deep into these behaviours and changes and systems and processes.
And look, if anyone wants to find out more about Kristen and her work you can go to irrationallabs.com and of course if you want to find out more about what we do here at Sense, head to sensegroup.com.au. And also be sure to check some of the resources we're providing to help brands emerge from the crisis stronger than before. So look, stay safe, stay connected, and we'll see you next time on Behind the Experienc